Your deceased client had a gross estate valued at $14 million. His estate includes approximately equal values
Question:
Your deceased client had a gross estate valued at $14 million. His estate includes approximately equal values of the following:
- Limited partnership interests that he has owned for four years in commercial office and retail buildings; these interests recently have shown less than 1% growth per year but nevertheless still produce significant income
- Renovated apartments that have been decreasing in value at the rate of 12% per year due to deterioration of the neighborhood in which they are located
- Personal property such as his home, cars, furnishings, and collections; the real estate values in his area have remained steady for the last several years
Your client's estate tax bracket is the highest allowed for the year of death. He has named his 21-year-old grandson as the executor of his estate. The grandson's income tax bracket is 12%.
If the grandson came to you for advice, you should inform him that the postmortem action available and advisable to minimize estate tax liability for his grandfather's estate is
A)
a waiver of executor commissions for the estate.
B)
establish an intentionally defective grantor trust
C)
the use of special use valuation on the commercial real estate holdings.
D)
the use of the alternate valuation date for estate assets.
Modern Advanced Accounting In Canada
ISBN: 9781259066481
7th Edition
Authors: Hilton Murray, Herauf Darrell